What you need to know:
China’s Foreign Affairs Minister, Wang Yi, announced on August 18th, that China will waive 23 interest-free loans for 17 African countries that had matured by the end of 2021
The Finance Ministry has said there is ‘certainly a possibility’ that Uganda will be among the 17 African countries to be forgiven of interest- free debt.
China’s Foreign Affairs Minister, Wang Yi, announced on August 18th, that China will waive 23 interest-free loans for 17 African countries that had matured by the end of 2021.
Wang announced the cancellation at the Eighth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) in Beijing, in what he said was, “China’s ability to keep its word with real actions.”
Wang Yi, in his statement that appeared on China’s Foreign Affairs Ministry website on August 19, did not divulge details about the 17 African countries that qualified for debt forgiveness.
Mr Moses Kaggwa, the acting director of economic affairs at the Finance Ministry, said: “That is still being discussed and the terms of forgiveness are not very obvious. It was supposed to be a bilateral discussion and completed.”
However, he did not provide details on whether Uganda has interest free loans with China, but maintained that Uganda currently has interest bearing loans with Asia’s economic giant.
An official at the Chinese Embassy in Kampala could not independently verify if there were any interest-free loans advanced to Uganda by China.
“The information is from the Ministry of Finance because they have the projects and loans involved. We cannot find the exact documents whether or not Uganda has interest free concessional loans,” the Chinese official said.
So far, there are scanty details on whether Uganda has any interest free loans.
However, research from Aid Data, a research lab housed at William & Mary’s Global Research Institute in Scotland shows, in 2012, the Chinese government signed an agreement with Uganda for a Shs26b interest-free loan for implementing “unidentified development programmes.”
The loan, according to the research institute, had a maturity period of 10 years. The loan agreement was signed by then Chinese ambassador to Uganda, Zhao Yali, and Uganda’s then State Minister of Finance, Fred Jachan Omach.
“So far, Uganda has no interest- free loans, but when you mention of 2012, that’s too early; perhaps that has already been forgiven,” the Chinese official said, noting, “If the loan is included, then Uganda will be on the list, and if it’s not included, then Uganda won’t be on the list.”
Data from the Ministry of Agriculture also shows China’s significant contribution to Uganda’s agricultural sector.